APPLICATION OF MULTI-CRITERIA DECISION MAKING USING FUZZY-TOPSIS IN DRUG DISTRIBUTION CENTER LOCATION SELECTION
THUMMAMATETA TREEVIROTMONGKOL
A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ENGINEERING (INDUSTRIAL ENGINEEERING) FACULTY OF GRADUATE STUDIES MAHIDOL UNIVERSITY 2013
COPYRIGHT OF MAHIDOL UNIVERSITY
Thesis entitled APPLICATION OF MULTI-CRITERIA DECISION MAKING USING FUZZY-TOPSIS IN DRUG DISTRIBUTION CENTER LOCATION SELECTION
….……………………………………… Miss Thummamateta Treevirotmongkol Candidate
….……………………………………… Lect. Jirapan Liangrokapart, Ph.D. Major advisor
...……………………………………….. Lect. Kiattisak Sritrakulchai, Ph.D. Co-advisor
.....……………………………………… Lect. Mongkol Thianwiboon, Ph.D. Co-advisor
..…...………………………………...... ใ …..…...………………………………...... Prof. Banchong Mahaisavariya, Asst. Prof. Thanakorn Naenna, Ph.D. M.D., Dip. Thai Board of Orthopedics Program Director Dean Master of Engineering Program in Faculty of Graduate Studies Industrial Engineering Mahidol University Faculty of Engineering, Mahidol University
Thesis entitled APPLICATION OF MULTI-CRITERIA DECISION MAKING USING FUZZY-TOPSIS IN DRUG DISTRIBUTION CENTER LOCATION SELECTION
was submitted to the Faculty of Graduate Studies, Mahidol University for the degree of Master of Engineering (Industrial Engineering) on December 13, 2013
.....…………………………………...... Miss Thummamateta Treevirotmongkol Candidate
…………………………………...... …………………………………...... Lect. Jirapan Liangrokapart, Ph.D. Capt. Kridiwat Suttiwaree, RTN. Member Ph.D. Chair
...... ………………………………...... ………………………………….... Lect. Kiattisak Sritrakulchai, Ph.D. Lect. Mongkol Thianwiboon, Ph.D. Member Member
…………………………………...... ………………………………...... Prof. Banchong Mahaisavariya, Lect. Worawit Israngkul, M.S. M.D., Dip. Thai Board of Orthopedics Dean Dean Faculty of Engineering Faculty of Graduate Studies Mahidol University Mahidol University iii
ACKNOWLEDGEMENTS
My thesis would be able achieve with advice and support from many person. I wish to express my sincere appreciation to my major advisor, Dr. Jirapan Liangrokapart. She spent her precious time to suggest me and continued assist throughout this study. I would like to thank Dr . Kiattisak Sritrakulchai , Dr. Mongkol Thianwiboon and Capt.Dr.Kridiwat Suttiwaree. They suggested the importance in this research and support as my advising committee. Besides, I would like to thank all experts. They give the opinions in drug distribution center criteria. I will remember their kindness. Finally, I wish to acknowledge my family, especially my father and mother, for their love, encouragement, understanding and financial supporting along thesis study.
Thummamateta Treevirotmongkol Fac. of Grad. Studies, Mahidol Univ. Thesis / iv
APPLICATION OF MULTI-CRITERIA DECISION MAKING USING FUZZY-TOPSIS IN DRUG DISTRIBUTION CENTER LOCATION SELECTION
THUMMAMATETA TREEVIROTMONGKOL 5337533 EGIE / M
M.Eng. (INDUSTRIAL ENGINEERING)
THESIS ADVISORY COMMITTEE: JIRAPAN LIANGROKAPART, Ph.D., KIATTISAK SRITRAKULCHAI, Ph.D., MONGKOL THIANWIBOON, Ph.D.
ABSTRACT Due to the 2011 flood crisis in Thailand, a number of drug manufacturers were inundated with flood water for a few months. Some drug manufacturers were not directly impacted by the flooding, but they could not distribute of drug products to their customers due to the transport disruptions. This resulted in a shortage of drugs supplies to many hospitals, especially those in the remote areas of the country. The purpose of this research is to identify the essential criteria for drug supply distribution; and determine and propose the best district in Bangkok for establishing a drug distribution center that will be able to operate during a flood crisis. The 15 criteria were finalized, and nine experts were asked to rate the criteria. The 50 districts were evaluated using fuzzy TOPSIS in order to select the best location for establishing drug distribution center. Sensitivity analysis was conducted to measure the weight of criteria impacts on the drug distribution center location. However, the result may be different as the weight of each criteria changes.
KEY WORDS: DRUG DISTRIBUTION CENTER / LOCATION SELECTION / DISRUPTION / MULTI-CRITERIA DECISION MAKING
220 pages
Fac. of Grad. Studies, Mahidol Univ. Thesis / v
การประยุกต์ใช้ MULTI CRITERIA DECISION MAKING ด้วยวิธี FUZZY TOPSIS ในการเลือก ที ตั งศูนย์กระจายยา APPLICATION OF MULTI CRITERIA DECISION MAKING USING FUZZY TOPSIS IN DRUG DISTRIBUTION CENTER LOCATION SELECTION
ธัมมาเมตตา ตรีวิโรจน์มงคล 5337533 EGIE / M
วศ.ม. (วิศวกรรมอุตสาหการ)
คณะกรรมการที ปรึกษาวิทยานิพนธ์: จิรพรรณ เลี ยงโรคาพาธ, Ph.D., เกียรติศักดิ ศรีตระกูลชัย, Ph.D., มงคล เทียนวิบูลย์, Ph.D.
บทคัดยอ่ ในปี พ.ศ.2554 เกิดวิกฤตการณ์อุทกภัยในประเทศไทย ผู้ผลิตยาถูกนํ าท่วมนานหลาย เดือน ผู้ผลิตยาบางรายไม่ได้รับผลกระทบโดยตรงแต่ไม่สามารถกระจายยาได้เนื องจากการขนส่งไม่ สะดวก ซึ งส่งผลเกิดการขาดแคลนยาในโรงพยาบาลโดยเฉพาะอยางโรงพยาบาลที อยู่ ไกล่ งานวิจัยนี จึงมีจุดประสงค์เป็นการค้นหาเกณฑ์ที สําคัญและเขตที ดีในกรุงเทพมหานครสําหรับจัดตั งศูนย์ กระจายยาที สามารถดําเนินงานในระหวางนํ่ าท่วมได้ เกณฑ์ที ครบถ้วนทั ง 15 เกณฑ์และถูกควบคุม โดยผู้เชี ยวชาญทั ง 9 ท่านนํามาใช้ในการให้คะแนน การเลือกที ตั งศูนย์กระจายยาจาก 50 เขตใช้วิธี fuzzy TOPSIS ส่วน sensitivity analysis ใช้ในการทดสอบถึงนํ าหนักเกณฑ์ที มีผลต่อการเลือกที ตั ง อยางไรก่ ็ตามผลของที ตั งมีการเปลี ยนแปลงเมื อนํ าหนักของเกณฑ์เปลี ยน
220 หน้า
vi
CONTENTS
Page ACKNOWLEDGEMENTS iii ABSTRACT (ENGLISH) iv ABSTRACT (THAI) v LIST OF TABLES ix LIST OF FIGURES xii CHAPTER I INTRODUCTION 1 1.1 Background and problem 1 1.2 Objectives 5 1.3 Scope of work 5 1.4 Expected results 5 1.5 Organization of the study 5 CHAPTER II LITERATURE REVIEWS 6 2.1 Distribution center 6 2.1.1 Distribution center : the definition 6 2.1.2 The activity of distribution center 6 2.1.2.1 Receiving 6 2.1.2.2 Storing 7 2.1.2.3 Picking 7 2.1.2.4 Dispatching 7 2.1.3 The advantage of distribution center 8 2.2 Hospital supply chain and the role of Drug Distribution Center 8 2.2.1 Hospital supply chain 8 2.2.2 Drug distribution center 9 2.2.2.1 The tasks of drug distribution center 10 2.2.2.2 The advantage of drug distribution center 11
vii
CONTENTS (cont.)
Page 2.2.2.3 Why is the location selection for establishing 11 drug distribution center important? 2.3 Theory of methodology 11 2.3.1 Multi-Criteria location Problem 11 2.3.2 Fuzzy TOPSIS 13 2.3.3 Why use Fuzzy TOPSIS technique 19 2.4 The Criteria for Location Selection 20 2.4.1 General Criteria 21 2.4.2 Healthcare specific Criteria 24 2.5 The flooding situation in 2011 28
CHAPTER III METHODOLOGY 30 3.1 Research Methodology 30 3.1.1 Identify the Location Selection Criteria 30 3.1.2 Select the potential location 39 3.1.3 Evaluate criteria by experts’ opinion 40 3.1.4 Collect the data of each location 40 3.1.5 Evaluate the location using fuzzy TOPSIS 40 3.1.6 Sensitivity analysis 40 3.1.7 Construct the drug distribution center location selection 40 program
CHAPTER IV RESULTS AND DISCUSSION 43
4.1 The evaluated criteria by experts’ opinion 43 4.2 The data of location 45 4.3 The evaluated location using fuzzy TOPSIS 47 4.4 Sensitivity analysis 54 4.5 Drug distribution center location selection program 58 CHAPTER V CONCLUSION 62 viii
CONTENTS (cont.)
Page REFERENCES 64 APPENDICES 74
Appendix A Number of hospitals by type and province 75
Appendix B The criteria data of 50 districts 78
Appendix C The questionnaire of location for establishing drug 106
distribution center (English)
Appendix D The questionnaire of location for establishing drug 109
distribution center (Thai)
Appendix E The information of experts 112
Appendix F The evaluation of location from experts’ opinion 113
Appendix G The result of sensitivity analysis 179
Appendix H 2012 International conference on industrial engineering 209
and management systems submitted paper
BIOGRAPHY 220
ix
LIST OF TABLES
Table Page 1.1 Top 10 Natural Disasters in Thailand for the period 1900 to 2012 sorted 3 by numbers of killed 1.2 Top 10 Natural Disasters in Thailand for the period 1900 to 2012 sorted 3 by economic damage costs 2.1 Linguistic variables for alternatives 15 2.2 Linguistic variables for criteria 15 2.3 Comparative analysis of multi-criteria decision making methodologies 20 3.1 General criteria for Location selection from literature review 32 3.2 Specific healthcare criteria for location selection from literature review 34 3.3 The location selection criteria and definition 36 4.1 The final criteria 44 4.2 The linguistic definition of criteria 48 4.3 The ranking of districts for location drug distribution center 54 4.4 The top five ranking of districts for location drug distribution center 55 A.1 The number of hospitals by type and province 75 B.1 The hospitals in 50 districts 78 B.2 The land cost, dust, waste, voice and labor in 50 districts 83 B.3 The station of sky electric train and the underground electric train in 50 85 districts B.4 The number of piers and the bus number in 50 districts 88 B.5 The number of Train station, entrance to expressway and exit to 93 expressway in 50 districts B.6 The drug distributor in 50 districts 94 B.7 The drainage tunnel and the Royally-Initiated Bangkok Flood Dyke in 97 50 districts B.8 The elevation above mean sea level and flood history in 50 districts 101 B.9 The measures to prohibit truck traffic 103 x
LIST OF TABLES (cont.)
Table Page B.10 The crime in 50 districts 104 E.1 The list of experts 112 F.1 Aggregate fuzzy weights for criteria 113 F.2 National environment and its impact criteria weights for alternatives 116 F.3 Accessibility criteria weights for alternatives 117 F.4 Labor criteria weights for alternatives 118 F.5 Connectivity to multimodal transport criteria weights for alternatives 119 F.6 Government and regulations criteria weights for alternatives 120 F.7 Demand criteria weights for alternatives 121 F.8 Infrastructure criteria weights for alternatives 122 F.9 Security criteria weights for alternatives 123 F.10 Information technology criteria weights for alternatives 124 F.11 Flooded management criteria weights for alternatives 125 F.12 Topography criteria weights for alternatives 126 F.13 Country planning criteria weights for alternatives 127 F.14 Cost criteria weights for alternatives 128 F.15 Competition criteria weights for alternatives 129 F.16 Density of traffic criteria weights for alternatives 130 F.17 Normalized fuzzy decision matrix for alternatives 131 F.18 Weighted normalized alternatives, FPIS and FNIS 144
F.19 Distances dv(Ai..A¯ ) for alternatives 157
F.20 Distances dv(Ai . A* ) for alternatives 167
F.21 Closeness coefficients (CC i) of the 50 districts 177 G.1 The result of equal weight all criteria 199 G.2 The result of highest weight national environment and its impact, 201 accessibility, labor and connectivity to multimodal transport criteria G.3 The result of highest weight government and regulations, 203 demand, infrastructure and security criteria xi
LIST OF TABLES (cont.)
Table Page G.4 The result of highest weight information technology, flooded 205 management, topography and country planning criteria G.5 The result of highest weight cost, competition and density of 207 traffic criteria
xii
LIST OF FIGURES
Figure Page 1.1 The total economic damages and losses from the 2011 flood in 4 Thailand as of December 1, 2011 2.1 Distribution center in supply chain 7 2.2 Hospital supply chain 8 2.3 Pharmaceutical supply chains from supplier to patient 9 2.4 Drug distribution model 10 2.5 A triangular fuzzy number ͕Ȭ 14 2.6 Two triangular fuzzy numbers 14 2.7 The basic flow chart of fuzzy TOPSIS 16 3.1 Steps of methodology 31 3.2 The map of Bangkok 39 3.3 The drug distribution center location selection drug program flowchart 42 4.1 The experts’ opinion on each criteria on average 45 4.2 The number of districts to each criteria 53 4.3 Weight the criteria 58 4.4 Weight the districts on each criteria 1 59 4.5 Weight the districts on each criteria 2 59 4.6 Calculation by Fuzzy-TOPSIS 1 60 4.7 Calculation by Fuzzy-TOPSIS 2 60 4.8 The result of location 61 B.1 The country planning of Bangkok 105
G.1 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 179 (all criteria are very low)
G.2 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 180 (all criteria are low)
G.3 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 181 (all criteria are medium) xiii
LIST OF FIGURES (cont.)
Figure Page
G.4 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 182 (all criteria are high)
G.5 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 183 (all criteria are very high)
G.6 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 184 (highest weight of national environment and its impactcriterion)
G.7 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 185 (highest weight of accessibility criterion)
G.8 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 186 (highest weight of labor criterion)
G.9 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 187 (highest weight of connectivity to multimodal transport criterion)
G.10 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 188 (highest weight government and regulations criterion)
G.11 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 189 (highest weight of demand criterion)
G.12 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 190 (highest weight of infrastructure criterion)
G.13 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 191 (highest weight of security criterion)
G.14 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 192 (highest weight of information technology criterion)
G.15 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 193 (highest weight of flooded management criterion)
G.16 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 194 (highest weight of topography criterion)
G.17 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 195 (highest weight of country planning criterion) xiv
LIST OF FIGURES (cont.)
Figure Page
G.18 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 196 (highest weight of cost criterion)
G.19 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 197 (highest weight of cost criterion)
G.20 The closeness coefficient (CC i) of 50 districts for sensitivity analysis 198 (highest weight of density of traffic criterion)
Fac. of Grad. Studies, Mahidol Univ. M.Eng.(Industrial Engineering) / 1
CHAPTER I INTRODUCTION
1.1 Background and problem The drug distribution center is one of the important players in healthcare supply chain which distributes drugs to the hospitals before the drugs are prescribed to the patients. The efficiency of distribution is necessary for patients safety and professional services because drug is one of the four necessities for people living. There are many reasons that distribution centers cannot operate effectively, hence drugs cannot be delivered to customers correctly. Cause of the disruption may be from natural disasters such as flooding, earthquake, storming, and tsunami or from other made disruption. The top 10 national disaster based on the number of killed and the economic damage costs during 1990-2012 are shown in Table 1.1 and Table 1.2. From both tables, flooding has been the important problem in Thailand for 112 years in term of skilled and cost. The recent flooding during 2011 and mid-January 2012 cause more than 800 people died and 13.6 million people were affected by the flood (Emergency Operation Center for Flood, Storms and Landslide, 2012). From the World Bank report, there were 65 provinces in Northern, Northeastern and Central of Thailand damaged and costed about 1,425 billion Baht. Of which, the manufacturing sector suffered the biggest damages and loses of 1,007 billion Baht (The World Bank, 2011) (Figure1.1). According to the Ministry of Public Health, over 10 drug factories of 393 drugs manufacturers in Bangkok and surrounding provinces were affected directly from the flood (The Government Public Relations Department, 2011). Like other organizations and industries, many of drug manufacturers had shut down during crisis due to the factories had been under the flood water or their employees could not go to work. The production lines were down for shortage of materials, energy or labors. Some drug manufacturers did not get the direct impact from the flooding, but they could not operate and distribute drugs to their customers due to transport disruption. Thummamateta Treevirotmongkol Introduction / 2
Although some drug manufacturers in flood–free area did not get the direct impact from the flood, the raw material suppliers could not distribute raw material for their production. Some main roads were inaccessible and indirect routes were used for transportation instead. The transportation interruption increased travel time and costs. These had a big impact on the entired hospital supply chain including manufacturers, distributors, hospitals, and the end customers-the patients (Liangrokapart, 2012). As a result, a lot of hospitals have experienced the stock shortage of drugs and medical supplies due to the transport disruption and the end customers had got all the shortage risks. In particular, the patients in emergency department or intensive-care units may get the worst impact from the drug shortage. As the transportation disruption was the major problem on the drug shortage in many hospitals, it was challenging to find solutions for solving the problem. The Minister of Public Health, Wittaya Buranasiri has instructed to the government on 1 November, 2011 to solve the problems urgently. The alternatives are to find new drug manufacturers distributors for replacement, to import drugs and to distribute the drugs fast to the target hospitals (Irin, 2011). This is corresponded with the perspectives and recommendation from hospital executives, drug manufacturers, drug distributors, and representatives of the Food and Drug Administration (FDA) on the open public session and personal interview. Thus, one possible solution is to build a new drug distribution center located on the flood-free zone area with full accessibility during the crisis so that the distribution center could continue transfer drugs to the customers without any disruption. In order to find the best new location for the distribution center, a number of factors should be identified and considered. Therefore, research questions are 1) What are the factors to be considered for establishing a drug distribution center? 2) Where is the best location to establish a drug distribution center to be saved from disruption?
Fac. of Grad. Studies, Mahidol Univ. M.Eng.(Industrial Engineering) / 3
Table 1.1 Top 10 Natural Disasters in Thailand for the period 1900 to 2012 sorted by numbers of killed (The Global Emergency Events Database (EM- DAT), 2012) Numbers of Disaster Date Killed Earthquake (from tsunami in the southern area) December 2004 8,345 Flood (65 provinces) August 2011 813 Storm (made landfall in Nakhon Si Thammarat October 1962 769 Province) Flood (Nakhon Si Thammarat province) November 1988 664 Earthquake ( near Patani province) June 1955 500 Tropical Storm Gay (the coast of Chumphon November 1989 458 Province) Flood (in the southern area) October 2010 258 Flood (in the north center area) January 1975 239 Flood ( in the center area ) August 1995 231 Flood (Uttaradit, Sukhothai, Phrae, Lampang and August 2006 164 Nan Provinces)
Table 1.2 Top 10 Natural Disasters in Thailand for the period 1900 to 2012 sorted by economic damage costs (The Global Emergency Events Database (EM-DAT), 2012) Disaster Date Damage (1000 US$) Flood (65 provinces) August 2011 40,000,000 Flood (Nakhon Si Thammarat Province) November 1993 1,261,000 Flood (affected from tsunami) December 2004 1,000,000 Earthquake (in southern area) November 1989 452,000 Tropical Storm Vicente (Bangkok) January 2005 420,000 Drought (in north-east area) December 1993 400,100 Flood (in northern area) August 1978 400,000
Thummamateta Treevirotmongkol Introduction / 4
Table 1.2 Top 10 Natural Disasters in Thailand for the period 1900 to 2012 sorted by economic damage costs (continued)
Disaster Date Damage (1000 US$) Flood (in northern and center area) January 1984 400,000 Flood (Nakhon Si Thammarat October 1993 319,850 Province)
This research presents the location selection concept for drug distribution center using multi-criteria decision making. It is used to manage information and difference decision makers’ opinion for choosing alternative. It applied fuzzy theory to model multiple criteria decision. The vagueness or unclear information which qualitative criteria and the rating of each alternative location f rom decision makers can be converted to fuzzy number. Th en, the fuzzy number was analyzed and used for location selection for drug distribution center.
Manufacturing sector 1,007 billion baht Tourism sector 95 billion baht Housing sector 84 billion baht Agricultural sector 40 billion baht
Figure 1.1 The total economic damages and losses from the 2011 flood in Thailand as of December 1, 2011 (The World Bank, 2011 )
In this research , we use the technique called TOPSIS (Technique for Order Preference by Similarity to Ideal Situation) which has been used to solve fuzzy multi - criteria decision making problems in several industries (Perçin (2008) , Krohling et al. (2011), Ho (1993) and Shyjith et al., (2012)) Fac. of Grad. Studies, Mahidol Univ. M.Eng.(Industrial Engineering) / 5
1.2 Objectives The objectives of this research are following: 1.2.1 To identify the essential criteria for selecting a drug distribution center location. 1.2.2 To propose the best district in Bangkok for establishing a drug distribution center which can still operate during flood crisis.
1.3 Scope of work This research considers only the 50 districts in Bangkok as possible location for establishing a drug distribution center which can still operate during flood crisis. The other unavoidable situation such as war, civil war, overthrow, protest, terrorism, sabotage, rebellion, closed road, riot or other natural disasters are not included in this study.
1.4 Expected results 1.4.1 A list of the essential criteria to be considered for location selecting for a drug distribution center. 1.4.2 The proposed best district in Bangkok for establishing a drug distribution center which can still operate during flood crisis.
1.5 Organization of the study In this study is divided as follows. Chapter 2 presents literature reviews. In chapter 3, presents the research methodology. In chapter 4, presents result and discussion. Finally, the conclusion is presented.
Thummamateta Treevirotmongkol Literature Review / 6
CHAPTER II LITERATURE REVIEWS
This chapter shows the related literature reviews for this research. We separate this chapter into four sections: 1) Distribution center 2) Hospital supply chain and the role of Drug Distribution Center 3) Theory of methodology 4) The Criteria for Location Selection and 5) The flooding situation in 2011.
2.1 Distribution center
2.1.1 Distribution center : the definition A distribution center (DC) is defined as a warehouse or specialized building which stores the products under the suitable type, dimension, volume, temperature and humidity to deliver to the customers (Sorat, 2009). It links between manufacturers and customers to flow finish products in the supply chain (shown in Figure 2.1). The good practice of distribution centers resulted in reducing inventory level, inventory carrying cost, the final price of the product and processing time in order processing. The key factors for location decision that affect retailers’ decisions to choose the manufacturer’s products are delivery time, quality, total cost, and ability to meet consumers’ urgent/special needs (Korpela and Lehmusvaara, 1999).
2.1.2 The activity of distribution center involves the four processes as follows (Shiau and Lee, 2010; Sorat, 2012). 2.1.2.1 Receiving Fac. of Grad. Studies, Mahidol Univ. M.Eng.(Industrial Engineering) / 7
Figure 2.1 Distribution center in supply chain (Raksri, 2010)
The receiving process is the first process that the products arrive to distribution center, the receiving department should order to get products out of the carrier to the specific area. Next, inspect the products such as number, size, weight, condition, and price follow distribution center’s invoice or the invoice that come with the trucks. After that, indicate the product code and the position of product. 2.1.2.2 Storing Move products to the shelf in the right position. The condition of storage is suitable for especially products. Such as, grain can keep fresh if store in low temperature (Liu and Ma, 2012). 2.1.2.3 Picking This process is to retrieve the products from their storage locations to satisfy customer orders and group the products that ordered from the same customer. 2.1.2.4 Dispatching This process is to redistribute the finished products to the retailers, wholesalers, or consumers. The products before distributed are checked follow the order, packed, and loaded in carrier. The distribution center provides the customer to deliver with 5Rs - Right Time, Right Place, Right Quantity, Right Quality, and Right Price.
Thummamateta Treevirotmongkol Literature Review / 8
2.1.3 The advantage of distribution center (Shiau and Lee, 2010) 1) Distribution center consolidates the products from many manufacturers to distribute the same customers. 2) Distribution center chooses the appropriate intermodal transshipment to proper each customer region. 3) Distribution center assorts products and packs allowed customer orders. 4) Distribution center helps supply chain to flow products thus, the supply chain is perfectly.
2.2 Hospital supply chain and the role of Drug Distribution Center
2.2.1 Hospital supply chain Gui-sheng (2010) described the hospital supply chain composed of participants, activities, and the three flows - logistic flow, capital flow and information flow. The main participants are suppliers, the hospital and patients which involve the value-added activities and processes to planning, coordinating, controlling and optimizing (shown in Figure 2.2). The aim of the service to patients is 6 Rs - right product, right quantity, right quality, right state, right time, and right place. Bourlakis et al. (2011) presented the supplier provided drugs and services to the customers-the hospitals, and the hospitals deliver the service to the end customers-the patients.
Figure 2.2 Hospital supply chain Fac. of Grad. Studies, Mahidol Univ. M.Eng.(Industrial Engineering) / 9
The pharmaceutical supply chain which comprise of organizations, processes, and operations shown in Figure 2.3. The supply chain is composed of one or more suppliers, manufacturers, warehouses/distribution centers, wholesalers, and retailers-the hospitals (Shah, 2004). The manufacturer orders the raw material from suppliers, produces drug and supply to the distributor. The raw material suppliers produce chemical for drug production. The drugs in supply chain are domestic drug and imported drug. The distributor supports drugs to the retailers-the hospitals, pharmacies, clinics but the retailer in this research is hospital. However, the pharmaceutical supply chain is not similar to other supply chain because required high follow to ensure security and strict regulations such as good manufacturing practice (GMP) (Yadav et al., 2011). Vibulpolprasert et al. (2002) defined drug distribution center as a warehouse or specialized building to distribute drugs to customers.
Figure 2.3 Pharmaceutical supply chains from supplier to patient (U.S. Food and Drug Administration, 2011)
2.2.2 Drug distribution center Most of the drug distribution centers are belonged to private organization except one belong to the government. There are totally 116 drug distribution centers and a Government Pharmaceutical Organization (GPO) (Vibulpolprasert et al., 2002). According to companies’ directory in MIMS (Thailand) (2008), the main private drug distribution centers are Zuellig Pharma Ltd., DKSH (Thailand) Ltd., and BJC Thummamateta Treevirotmongkol Literature Review / 10
Healthcare Co, Ltd. Zuellig Pharma Ltd. is the distributor for 46 pharmaceutical manufacturers, DKSH (Thailand) Ltd. is the distributor for 39 pharmaceutical manufacturers and BJC Healthcare Co, Ltd. is the distributor for 16 pharmaceutical manufacturers. U.S. Food and Drug Administration (2003) and Deloitte Consulting LLP (2008) explained three models of the drug movement through the drug distribution system (Figure 2.4). Model 1 is the simplest that manufacturer sell directly to the retailer. This model is suitable for high-price drugs with a limited provider. Many manufacturers use model 2, there are one distributor or even a repackager but model 3 differ from model 2 that there are more distributors. The manufacturer delivers bulk drug containers to distributor and the distributor often repackages into smaller containers before sale to the retailer.
Figure 2.4 Drug distribution model (U.S. Food and Drug Administration, 2003)
2.2.2.1 The tasks of drug distribution center (World Health, 2010) Fac. of Grad. Studies, Mahidol Univ. M.Eng.(Industrial Engineering) / 11
The task of distribution center is depended on agreement between the drug owner and distributor. Drug distributors are classified into the drug owner’ distributor and employ distributor (third party logistics). The services of distributor are procuring, purchasing, holding, storing, selling, supplying, importing, exporting, or movement of drugs, with the exception of the dispensing or providing drugs directly to a patient. 2.2.2.2 The advantage of drug distribution center (Marr, 1989) Increase convenience to the hospital/pharmacies to order drugs. A service from efficient distribution is greater increasing opportunity for activities at the retail level, ensuring a competitive advantage. Drug distribution center services specific requirement, such as relabeling and insert the necessary information drug depending on country. 2.2.2.3 Why is the location selection for establishing drug distribution center important? In hospital executives’ opinion for Healthcare Supply Chain Disaster Management seminar (2012), the director of hospitals agree with establishing a new drug distribution center for supporting hospital during flood crisis (Metetrirat et al., 2012). Bangkok Hospital changed the number of stocked drugs from using 90 days to 110 days. Songklanagarind Hospital also changed the number of stocked drugs from two months to four months because they afraid drug shortage. The new location of a drug distribution center that able operate during flood crisis is used to solve this problem.
2.3 Theory of methodology
2.3.1 Multi-Criteria Location Problem Many criteria are considered for best location selection that is important to manage scientific, social, and economic, and to reduce the wrong decision. The location selection is one of multi-criteria decision making (MCDM) problem due to many criteria considered in decision process. The main task of decision making is to Thummamateta Treevirotmongkol Literature Review / 12 collect related information, rank the bound of the feasible alternatives, and select appropriate alternative (Zhou et al., 2011). There are many techniques to solve multi- criteria decision making problem. The example of widely utilized techniques areas are Analytic Hierarchy Process (AHP), Analytic network process (ANP) as follow: Analytic Hierarchy Process (AHP) is one of multi-criteria decision making method. AHP technique was developed by Thomas L. Saaty in 1970s that compare the relative elements in each level of the hierarchy and evaluates the alternatives in the lowest level of the hierarchy to select the best decision among multiple alternatives (Sipahi and Esen, 2010; Triantaphyllou and Mann, 1995). The weight of important criteria is obtained by using a set of pair wise comparisons. The example for application of AHP technique that Tsita and Pilavachi (2012) used AHP to choose the fuel for the Greek road transport sector. Triantaphyllou and Mann (1995) used to find the best alternative to upgrade the computer system of a computer integrated manufacturing (CIM) facility. Wu, Chen et al. (2012) used AHP to weight the performance evaluations of higher education combined VlseKriterijumska Optimizacija I KompromisnoResenje (VIKOR) method to rank the performance of each university. Analytic network process (ANP) is proposed by Thomas L. Saaty, the author of the AHP method in 1996. ANP represent the relationships of hierarchy, but it does not strict about a hierarchical structure as AHP (Liu et al., 2005 ). Öztay şi et al. (2011) used ANP to compare the customer relationship management (CRM) performance of e-commerce firms. Atmaca and Basar (2012) determine the suitability of existing power plants in Turkey by ANP method. The location selection problem is considered many alternative locations with multi-criteria. The multi-criteria decision making is classified into two categories: the multi-attribute decision-making (MADM), and the multi-objective decision- making (MODM) (Zanjirani Farahani and Hekmatfar, 2009; Hwang and Yoon, 1981). The multi-attribute decision-making technique is considered the limited alternative and each alternative response to each objective in a specified level. The best alternative satisfies to the priority of each objective and the interaction between them. The popular technique to solve this problem are dominant, maximin, maximax, conjunctive method, disjunctive method, lexicographic method, elimination by Fac. of Grad. Studies, Mahidol Univ. M.Eng.(Industrial Engineering) / 13 aspects, permutation method, linear assignment method, simple additive weighting (SAW), hierarchical additive weighting, ELECTRE, TOPSIS, hierarchical tradeoffs, LINMAP, interactive SAW method and MDS with ideal point. The multi-objective decision-making technique is considered various components and the best alternative is attained some acceptable levels from a set of some objectives. The used techniques to solve this problem are global criterion method, utility function, metric L-P methods, bounded objective method, exico graphic method, goal programming, goal attainment method, method of Geoffrion, interactive GP, surrogate worth trade off, method of satisfactory goals, method of Zionts-Wallenius, STEM and related method, SEMOPS and SIGMOP method, method of displaced ideal, GPSTEM method, method of Steuer, parametric method, C-constraint method and adaptive search method.
2.3.2 Fuzzy TOPSIS After collect criteria from literature review and consider potential location, we ask the decision makers to select and weight the appropriate criteria for using in location selection. The decision maker’ opinions are the speech that difficult to translate to the number but fuzzy help to change the quality data to quantity data (Bellman and Zadeh, 1970). The definitions of fuzzy sets are expressed as follows (Klir, 1992; Klir, 1995; Zimmermann, 1995).
Definition 1. A universe of discourse, X, whose generic elements are indicated by x. The value of membership of x in fuzzy set is defined by where . → 0,1 , ∀ ∈ Definition 2. A triangular fuzzy number can be denoted as a triplet . The membership function of fuzzy number defined by = , ,
0, ≤ – (1) , ≤ ≤ = – , ≤ ≤ 0, > Thummamateta Treevirotmongkol Literature Review / 14 where and are real numbers. The in gives the maximal grade of <